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In this decade alone, over $198,000,000 in fraud claims have been made by professional athletes against business professionals and partners.
Racehorse Investment Scheme
Estimated Lost: $308,000+
Players Involved: Danny Woodhead (NFL), Jordan Norwood (NFL), Reggie Hodges (NFL), Chansi Stuckey (NFL)
Summary: Fraudster led players to believe they were investing in a race horse and would receive a percentage of the winnings. Investment funds were used to pay for cars, clothing and gambling expenses.
Source: Cleveland.com
Alabama Casino Venture + BB&T
Estimated Lost: $53,000,000+
Players Involved: Jevon Kearse (NFL), Jamaal Anderson (NFL), Lito Sheppard (NFL), Santana Moss (NFL), Ray Lewis (NFL), Brandon Meriweather (NFL), Jacob Bell (NFL), Clinton Portis (NFL), Gerard Warren (NFL), Fred Taylor (NFL), Derrick Gaffney (NFL), Greg Jones (NFL), Kenard Lang (NFL), Frank Gore (NFL), Santonio Holmes (NFL) and Tavares Gooden (NFL).
Summary: Now banned NFLPA approved financial advisor placed investment funds into highly risky, questionable and unauthorized investments. Roughly $30 million was tied to an illegal Alabama casino venture and the rest went toward imprudent investments.
Source: Yahoo! Sports
Ash Narayan and Ticket Reserve Inc.
Estimated Lost: $33,000,000+
Players Involved: Mark Sanchez (NFL), Jake Peavy (MLB) and Roy Oswalt (MLB)
Summary: Gaining their trust by claiming to be devout Christian, Ash Narayan funneled players investment funds into Ticket Reserve Inc., a company where he was a board member and shareholder, without players' authorization. Fraud included fake documents, backdated promissory notes, and "finder's fees."Ticket Reserve was an online platform that allowed fans to bid on big sporting events.
Source: The Wall Street Journal
Donald Watkins and Waste-to-energy Ventures
Estimated Lost: $6,000,000+
Players Involved: Undisclosed former professional football and basketball players.
Summary: Watkins falsely told professional athletes, who were investors in venture firm that their money would be used to fund waste-to-energy projects and that Waste Management was seriously considering acquiring the firm in a multibillion dollar deal. Instead, Watkins used significant portions of the investor funds to pay off his personal expenses and there was never any probability of an acquisition by Waste Management.
Source: U.S. Securities and Exchange Commission
Eren Niazi and Open Source Storage
Estimated Lost: $2,000,000+
Players Involved: Patrick Willis (NFL)
Summary: After taking a job as executive vice president at Open Source Storage, Willis entrusted Niazi with investment funds on account of representations that were later determined to be false. Instead, Niazi used investment funds to enrich himself at Willis's expense.
Source: Inc.com
Michael Vick (of Arkansas) and Bitcoin Business Venture
Estimated Lost: $15,000,000+
Players Involved: Darren McFadden
Summary: McFadden's granted his business manager and financial advisor (Vick) authorization to manage his bank accounts, manage his credit card accounts, pay his expenses, provide cash for his personal expenses, manage his investment and retirement accounts, manage his real estate investments, provide advice regarding wealth and cash management, growth, income preservation and wise investment strategies. Vick abused McFadden's trust and made series of unauthorized and imprudent investments that caused McFadden to lose money.
Source: McCauley Investment Risk & Legal Consulting
Charles Banks
Estimated Lost: $20,000,000+
Players Involved: Tim Duncan
Summary: Duncan sued his financial adviser (Charles Banks), claiming Banks steered investment funds into projects, such as hotel, beauty products and wineries, in which Banks had a personal interest. Banks also falsified documents in Duncan's name in order to put in to effect and/or conceal unauthorized transactions.
Source: CBS Sports
Martin Blazer and Sibling the Movie and Mafia the Movie
Estimated Lost: $2,350,000+
Players Involved: Not Disclosed
Summary: Financial adviser accused of taking money without permission from the accounts of several professional athletes in order to invest in movie projects and make Ponzi-like payments.
Source: U.S. Securities and Exchange Commission
Fuad Ahmed and Success Trade Securities
Estimated Lost: $18,000,000+
Players Involved: Undisclosed former professional football and basketball players
Summary: Ahmed and Success Trade sold and issued Success Trade promissory notes to investors while misrepresenting or omitting material facts that would have shown that the parent company was in horrible financial condition. Success Trade and Ahmed claimed the proceeds would be used for business expenses to build the parent company's businesses. Instead, Ahmed used the funds to make make unsecured loans to himself for personal expenses and to carry on a Ponzi scheme.
Source: The Washington Post
Haider Zafar
Estimated Lost: $7,500,000+
Players Involved: Mike Miller (NBA), James Jones (NBA) and Rashard Lewis (NBA)
Summary: Zafar claimed to be from a wealthy Pakistini family that owned hotels, oil businesses and textile plants. Based on these claims, Zafar induced 3 Miami Heat players to front the costs of 3 season ticket packages worth more than $1,000,000 and give him money for investment purposes. Instead of investing the money, Zafar spent it on jewelry and luxury cars, such as Aston Martins, a Maserati, a Lamborghini and a Rolls-Royce convertible.
Source: Dispatch.com
Joseph Lombardo and Prim Capital Corp.
Estimated Lost: $3,000,000+
Players Involved: National Basketball Player Association (NBPA)
Summary: Lombardo's firm, Prim Capital Corp., firm managed approximately $250 million for the NBPA. In his attempt to the defraud the union, Lombardo created fake service contracts between the firm and the NBPA, forged the signature of a deceased individual for approval of such contracts and threatened others to help cover the fraud. Allegations were made that Prim Capital Corp was selected to manage the union's funds because the NBPA Executive Director's son was on Prim Capital Corp's board.
Source: Bloomberg
Bank of America, Michael Stern, Michael Bock and Eva Weinberg
Estimated Lost: $20,000,000+
Players Involved: Dwight Freeney
Summary: Freeney claimed certain advisors associated with Bank of America misrepresented their financial management skills and business expertise. As a result of reliance on the representations, Freeney entrusted advisors to the detriment of $20 million.
Source: USA Today, Reuters
Aaron Parthemer and Morgan Stanley Smith Barney
Estimated Lost: $900,000+
Players Involved: Keyon Dooling (NBA) and John St. Clair (NFL)
Summary: Dooling and St. Clair invested $700K and $200K, respectively, in what proved to be a worthless apparel company. Parthemer, the rogue broker involved, facilitated the investment.
Source: Stock Broker Fraud Blog
SunTrust, Martin Kelly Capital Management, William Crafton
Estimated Lost: $8,500,000+
Players Involved: A.J. Feeley (NFL), Brent Celek (NFL), Jason Terry (NBA), Kevin Curtis (NFL), Heather Mitts (USWNT)
Summary: According to the lawsuit, Crafton lied about investment portfolios when he told the professional athletes their funds were being placed in low-risk funds. Instead, Crafton used funds for high-risk investments and a Ponzi scheme.
Source: Law360.com
Robert Gist and Resource Horizons Group
Estimated Lost: $650,000
Players Involved: Bruce Wilkerson (NFL)
Summary: Wilkerson lost $650,000 through an alleged Ponzi scheme operated by Resource Horizons Group. Although awarded $2 million in damages, Wilkerson will be unable to collect any funds. Resource Horizons Group folded due to a backlog of outstanding and unpaid arbitration claims totaling more than $4 million.
Source: InvestmentNews
Peggy Fulford and King Management Group & Associates
Estimated Lost: $6,000,000+
Players Involved: Ricky Williams (NFL)
Summary: Williams and his wife claimed Peggy Fulford and her King Management Group of draining his account of $6 million through wire transfers, debits, checks and cash expenses. Fulford's fraud included misrepresenting herself as a Harvard graduate and an attorney. She also used false statements to perpetuate the fraud overtime.
Source: Courthouse News Service
Kurt Barton and Triton Financial
Estimated Lost: $5,000,000+
Players Involved: Ty Detmer (NFL), David Akers (NFL), Earl Campbell (NFL), Chris Weinke (NFL), Jeff Blake (NFL)
Summary: Barton was founder and CEO of Triton Financial and a longtime friend of Detmer. Through Barton's ties with Detmer and the Heisman Trophy Trust, other professional players were recruited as investors. Barton and Triton told investors they would be purchasing properties, businesses and other assets with their funds. Instead, investment funds were used to satisfy the needs of other ventures and the need to pay quarterly dividends or redemptions to prior investors. To help hide his scheme, Barton presented fabricated and fictitious versions of his E*Trade monthly account statement to financial institutions, commercial lenders and potential investors. (Note: Initial SEC complaint filed in 2009.)
Source: NFL.com, FBI.gov, ESPN.com, SEC.gov
Robert Lunn and Lunn Partners
Estimated Lost: $1,400,000+
Players Involved: Scottie Pippen (NBA)
Summary: Pippen engaged the financials services of Lunn because of recommendations he received from certain parties associated with the Chicago Bulls. Through the assistance of his accountant, Pippen found out that Lunn had been forging Pippen's signatures on financial documents, such as a $1.4 million loan that Lunn used the proceeds from for personal expenses.
Source: Chicago Tribune
Neil Schwartz and Jonathan Feinsod
Estimated Lost: TBD
Players Involved: Darrelle Revis (NFL)
Summary: Revis claimed his former sports agency increased a commission fee (10% to 50%) within an endorsement agreement without his knowledge.
Source: NJ.com, Courthouse News (PDF)
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